Question

McDowell’s Company received their monthly bank statement for May 2016. An analysis of the bank statement and their cash account revealed the following facts. Prepare the bank reconciliation for McDowell’s Company for May:

1.         The bank statement has a balance of $6,925.

            2.         The cash account has a balance of $4,622.

            3.         A deposit in transit made on April 30^th was $4,200.

            4.         Outstanding checks totaled $5,800.

            5.         The bank collected a note of $1,200, plus interest of $70 less a service charge of $10.

            6.         The bank statement showed a monthly bank service charge of $40.

            7.         The bank statement included a check for $550 written to Delta from a customer that was returned for insufficient funds.

            8.         Check No. 730 was written and cleared the bank for $429. McDowell’s recorded the check in their records for $492.

            9.         The bank statement showed that $45 was added to the checking account on during May for interest earned by the company.

            10.       Check printing fee of $75 was incorrectly charge to McDowell’s by the bank.

Answer 1

Bank reconciliation Statement
Particulars	Amount
Cash balance per books	4,622.00
Deposit in transit not coming in bank book	(4,200.00)
Outstanding cheques	5,800.00
Note collected by bank = 1200 + 70-10	1,260.00
Monthly service charge	(40.00)
NSF Check from Customer	(550.00)
Incorrect recording in McDowell’s book = 492-429	63.00
Interest earned by the company	45.00
Check printing fee incorrectly charge to McDowell’s by the bank	(75.00)
Cash balance per bank	6,925.00